This is a kind of business where franchising, direct selling, and the use of the internet are combined. You are an independent contractor representing a company with products you can sell online. Network marketing is an approach where the company creates a way for you to expand your business with the help of others known as a downline.

You make your money based on the sales you reach for a particular product or service. You also make money on the sales of people you recruit to join your business known as distributors or your downline. The person who makes the most money is the one who combines both personal sales and the sales of their downline to a greater level. The internet has made that possible for people all over the world to do that.

Many people think of a network marketing business as a pyramid scheme. Pyramid schemes are illegal and mlm companies are not pyramid schemes as long as a product is sold at both the retail and wholesale level. Also the compenstaion plan must make it possible for your downline to earn more than you. If you think about it corporate America is more of a pyramid scheme than most network marketing companies.

Starting at the top with the CEO and filtering down thru various levels of managment, and down to the lowest employee, the higher you are in this pyramid the more money you make. The lower you are the less you earn and this has created a feeling of distrust with everything that has happened in the past. CEO's and Presidents earning millions of dollars as the company is going down the drain has caused people on the bottom of this pyramid to re-think their loyalty to the company and has them looking for ways to make more money and protect their future.

Thanks to the internet most distributors do not have to stock a lot of products which was another criticism of mlm companies in the past. You may know of someone who had a garage full of products they couldn't sell because they bought a stocking order to get started. Today a retail customer and a distributor can order online or call a 1-800 number and just order as they need it. The same for you downline. They get their products the same as you. This form of dropshipping elimates the need to stock products and frees up your cash flow to promote your business.

Thanks to the internet sales and support materials can be provided online which lowers the cost of becoming a distributor to start with. Combine that with personal websites, email follow, and inside customer support and anyone can build a large network marketing business online if they are willing to work hard. This can be done all over the world where in the past that was almost impossible to do unless you actually moved to the country where you wanted to build your business.